Hot Stock Cypark rises 9.5% on strong earnings seen

by **Cals** Thu 20 Mar 2014, 18:43

Hot Stock Cypark rises 9.5% on strong earnings seen

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 20 March 2014 12:29

KUALA LUMPUR (Mar 20): Cypark Resources Bhd rose as much as 9.5% as the integrated environmental engineering and technology provider is seen to possess strong earnings.

At 12.09 pm today, Cypark rose 23 sen or 9.5% to RM2.64. The top gainer saw trades of some 2.6 million shares.

A dealer told theedgemalaysia.com over the telephone: “Cypark is fundamentally strong with good recurring income.”

“We think investors are accumulating the stock for long term instead of a short term buy and sell.”

Earlier this week, Cypark announced it had clinched a RM17.8 construction job to construct a private school in Johor.

Public Investment Bank Research in a note yesterday deemed the contract ‘a welcome one’ despite Cypark ventured beyond its normal business scope.

“This will replenish Cypark's orderbook for its non-renewable energy segment.

“However, we make no adjustments to our earnings estimates as this forms part of our replenishment assumption of about RM100 million for this year,” said Ching Weng Jin, a Public IB research analyst.

Furthermore, Ching pointed out Cypark is expected to reap full earnings contributions from its collective 40MW solar capacity, where it enjoys feed-in-tariff rates of between 80 sen to 95 sen.

“Cypark is a prime beneficiary of its solar capacity, given its early-move status within the renewable energy sector,” said the analyst.

“Solar power generation is a lucrative business as our country is blessed with ample sunlight the whole year round,” Ching added, noting 1Malaysia Development Bhd’s foray into the attractive renewable energy sector.

Public IB said it rated Cypark an ‘outperform’ with an unchanged target price of RM3.20.